Recognizing and exploiting opportunities is the life blood of successful entrepreneurship, but chasing opportunities can also be the downfall for new companies if their efforts become spread too thin. Selecting the opportunities that are worth pursuing has been a challenge for Toronto-based Figure 1 – a company that lets health care professionals share medical images – throughout its short life.
"There is a saying that 'money is oxygen' for a startup," says co-founder Gregory Levey, "and that is very true for us. We are a startup and we will remain a startup for some time. Since we want to become a fast-growth business, we have to be very selective in the opportunities we pursue. Each path we go down takes time and money and it is important to conserve both for the things that matter most."
How do the founders of Figure 1 maintain the focus that's necessary to achieve their goals?
In 2012, Joshua Landy, a critical care physician, was studying how doctors could use mobile devices in their workflow as a visiting scholar at Stanford University. He returned to Toronto with half a dozen ideas for innovative healthcare solutions and got together with Gregory Levey, a communications professor, and Richard Penner, a software developer, and thrashed out the ideas over dinner.
Two ideas seemed workable: a mobile billing application and a crowdsourced platform for physicians to share images and have conversations about them.
In Jan. 2013, they launched Figure 1 and began working on both the app and platform. They soon realized, however, that delving into both ideas concurrently would slow them down.
"We knew we didn't want to become a company selling multiple apps," recalls Mr. Levey, "we wanted to become a company that owns one particular space. The photo-sharing platform was beginning to take off, so we decided to focus exclusively on it and killed off the mobile billing app."
Figure 1 enables health care professionals to post and comment on medical images using a mobile phone or tablet. There's a verification procedure for licensed health care professionals and photos are processed to ensure that the individual patients cannot be identified.
The images posted are often textbook examples of common conditions like Lyme disease or rare conditions like leprosy. Users can agree with a posted comment by "favouriting it." They can also search for specific conditions; for example, a user might think a patient has contact dermatitis but wants to see some pictures of it before making a diagnosis.
Figure 1 is explicitly not a diagnostic tool, but the platform does enable doctors to ask for a second opinion on a condition they're encountering when a second opinion might be hard to find, like in remote communities or in the ICU at 4 a.m.
Before launch, the founders of Figure 1 populated the platform with images taken by Dr. Landy and a small group of other physicians. They did presentations about it at conferences for medical students and residents, believing – correctly – that newly minted doctors would be early adopters of the technology.
With thousands of medical students across North America active on the platform, Figure 1 has gained the attention of prominent medical schools that would like their own private platform for teaching purposes. Mr. Levey says this is one opportunity they are considering. Another possibility is developing a platform for veterinarians, who are also very interested in the technology. As well, Figure 1 has been invited to participate in a partnership with a high-profile organization working in a developing country.
The co-founders believe that these are all worthy and potentially lucrative opportunities to pursue, but they can't do all of them and need to decide on priorities. How do they do this?
Mr. Levey contends that you need to understand what kind of business you are, and what kind of business you want to be, in order to decide what opportunities to pursue. Focusing on a clear objective not only ensures that scarce time and money goes to the most critical activities, but it also helps you obtain external financing. "Venture capitalists don't like founders giving them a list of the things a company can do. They want you to nail one thing really well," says Mr. Levey. Therefore, the first criterion they use is whether an activity will distract them from their core objectives, and confuse investors who are looking for one thing Figure 1 is really good at.
The second criterion is the cost involved. The founders are wary of participating in the partnership in the developing country, for example, because applying for a grant to fund such a new initiative could take two weeks of managerial time away from their core activities. They have learned that roughly 75 per cent of the costs of pursuing a new initiative are related to the development of the technology to support it. So, expected development time is crucial to consider, and they try to find ways to do new things – such as medical school initiatives – that complement rather than detract from growing the user base on their platform.
However, growing the user base is their foremost priority, and there are lots of things that need to be done in order to grow it successfully. Their user base is largely in North America, but they've recently expanded to the United Kingdom, Ireland, Australia, and New Zealand. To add a country is not merely a matter of encouraging health care professionals in that country to sign on: different countries have different professional licensing and credentialing regimes and the system has to be able to verify practitioners licensed under different regimes so that its integrity is maintained as its user base expands internationally.
As well, the technology was originally developed for iPhones, but has since expanded to iPads, Android, and the web. Further, if the founders want to expand beyond the English-speaking world, they need to offer the system in multiple languages. Now that Figure 1 is on multiple platforms and considering adapting to multiple languages, they know that it will get more complicated and more time-consuming to add or change a feature, because it needs to be added or changed multiple times. Thus, on a daily basis they are trading off how important a feature or initiative is to their core objective, and how much development time it will take.
In the past year, the Figure 1 user base has grown to tens of thousands of health care professionals. Thousands of images are on the platform and there are more than one million image views per week. The company closed a financing round of $2-million in Nov. 2013 to enable it to build up its team.
Soon after, Figure 1 participated in "48 hours in the Valley" a program run by prominent Canadians in Silicon Valley that invites up and coming Canadian startups to California for two days of workshops, meetings and networking. The visit reinforced their belief that they were right to focus narrowly in order to, as Mr. Levey puts it, "swing for the fences." Figure 1 consistently makes the decision to not stray from its current mission, even when very enticing opportunities present themselves.
Becky Reuber is a professor of strategic management in the Rotman School of Management of the University of Toronto.
This is the latest in a regular series of case studies by a rotating group of business professors from across the country. They appear every Friday on the Report on Small Business website.